Whether you are a first time home buyer, or a career investor, these are the 10 steps to buying a home. It is so important to remember that buying a home doesn’t happen overnight and will take time to ensure everything is in order to make your home buying process seamless and smooth.
Step #1 to Buying a Home – Save for your down payment
Create a budget and do your research. There are lots of low down payment options available.
Depending on your loan type, you may be looking at a down payment anywhere between 0%-20%. In all honesty, you can’t truly know what you will need for your down payment until you have talked with a lender about your financial standing and home goals. They will be able to set you up in the perfect loan program for you and will let you know exactly what kind of down payment you will need to purchase a home. Reference Step #4 for a breakdown of how pick the perfect lender.
Step #2 to Buying a Home – Know your credit score
Learn your score and clean up outstanding debts like student loans and credit cards.
In addition to saving for a down payment, you will need to ensure your credit score is in good standing to purchase a home. As a matter of fact, your outstanding debts such as student loans, credit cards, car loans, and miscellaneous loans will effect your credit score and your ability to purchase a home.
Where can you access your credit score and your debts?
- I highly recommend having a lender run your numbers; they know exactly the steps it will take to not only fix your credit with the goal of purchasing a home but also, ensure you are doing what you need to to get the best interest rate.
- You can check it on a credit site such as Credit Karma. Although this will tell you your credit and debts, it is likely not the same credit score a mortgage company will see. In addition to it’s inaccuracy, places like Credit Karma won’t give you steps to improve your credit score like a lender can.
Step #3 to Buying a Home – Find a real estate agent
We are here for you! As a matter of fact, we would love to help you with every step of the process so you never have to question if you are preparing properly for home ownership. Moreover, we would be honored to interview for the job as your Realtors®!
When interviewing for a real estate agent be sure to check their reviews. You want to ensure sure they have great reviews that reflect the service you would like to receive. Also, don’t forget to check their experience in the market you will be looking to purchase in.
Step #4 to Buying a Home – Get pre-approved
Differentiate yourself as a serious buyer and have a better sense of what you can afford.
In our crazy market today, you will want to be fully pre-approved before you begin your search for the perfect home. Although it may take a little bit of time, it is well worth your time to contact a lender and get pre-approved. In addition to showing that you are a serious buyer, getting pre-approved will allow you to know exactly what you can afford. There is nothing worse than falling in love with a home before you’re pre-approved and then realizing you cannot afford it.
Just like your search for a real estate agent, you will need to interview lenders to find the perfect one to get your pre-approval from. In fact, I encourage all of my buyers to interview several lenders. Generally, lenders all have similar programs, you’re just looking for the one that will work best with your needs. Moreover, you’ll want to ensure they have experience with your market and your loan type to ensure you walk away, not only with a home, but with the most amount of money left in your pocket.
Step #5 to Buying a Home – Find a home
Work with your agent to find a home in your budget that meets your needs.
Not only is it important to find a home that meets all of your home goals, it is also equally important to make sure the home is within your budget. Be sure to listen to your real estate agent! They are there to give you impartial facts about the home so you know exactly what you are getting into.
Although it may sound crazy, consider looking at homes outside of your target neighborhood. You may see that something you thought was a “must” in a home may in fact be what is keeping you from finding the perfect home. Moreover, keep an open mind when viewing homes; you may be surprised with what you actually want in your next home. Alternatively, make sure you speak up about what you will not compromise so you aren’t wasting your time viewing homes that never had a shot at being your home.
Step #6 to Buying a Home – Make an offer
Determine your price and negotiate the contract.
Besides finding the perfect home, making an offer may be one of the most crucial parts of your home buying journey. While you want to ensure your offer is strong, you shouldn’t have to compromise what is important to you. Make your offer a win-win for all parties. Have your agent check in with the list agent to find out what is important to the seller. Be sure to write in some terms for the seller while writing your terms to ensure it feels like a win-win for all parties.
Consider writing letter to the seller about how the home would fit your dreams. Tug at their heartstrings. Explain how you could see yourself in the home and don’t forget to include a picture. Not only will this help the seller differentiate your offer from other offers, but it will also make you feel more human to the seller. In the event that there are multiple offers on the home, this will give you the upper hand on other offers.
Step #7 to Buying a Home – Have a home inspection
Address any hidden issues in the home with the seller.
It is incredibly crucial to get a home inspection. In the event that there are any issues with the home, it is important to know about those issues prior to owning the home. Once you’ve had a home inspection, you can ask for repairs on the home. I always recommend requesting repairs on big money items. Items that effect the health, safety, and structural integrity of the home. Try not to request simple cosmetic repairs that you could accomplish on your own. Always keep in mind (when buying a ‘used home’) that there will always be some repairs needed; you aren’t purchasing a perfect blank slate.
Be willing to compromise the little things so you can get the big things addressed. A seller is more likely to agree to 2 big repairs as opposed to 10 smaller repairs. Choose your repair request list wisely. And again, always listen to and respect your real estate agent’s advice as they’ve negotiated these things a time or two.
Step #8 to Buying a Home – Get a home appraisal
Ensure the property is worth the price you are prepared to pay.
Getting a the home appraised is a key step in buying a home. Most lenders will require an appraisal showing value before they will approve the loan on a property. Be sure to order your appraisal in a timely manner. Once the appraisal proves value, your’e in the home stretch of the home buying process!
Step #9 to Buying a Home – Close the sale
Schedule a closing date once the loan is approved so you can sign the final paperwork.
Although you likely already have a close date set, your close date can be affected by a ton of factors through the home buying process. After appraisal is received, your file will be passed to the underwriter for final loan approval. Once you get final loan approval, the lender will send your final documents to the title agency for signature. Your title agent will schedule your signing and then pass the paperwork back to the lender. Lastly, once the home is recorded with the county, it’s officially yours!
Step #10 to Buying a Home – Move in
Congratulations! You’re a homeowner.
Hooray! You’ve finally made it to the end of the home buying process. Get in there and start turning your house into a home! Unlike your last rental, you can paint the walls and do all sorts of home improvement projects. We wish you and yours the best in your new home!
Don’t forget that your real estate agent is there for you even after you have closed on your home. If you ever need any recommendations for home repair companies, never hesitate to call to get their list of tried and true professionals. We’ve got you covered!
Pointers for picking the perfect Realtor and Lender:
- Look into how much experience they have in the industry and in the area you are looking to buy.
- Read their reviews to ensure they are giving adequate service.
- Be sure to Interview several to make sure their business model fits your expectations.
Some Highlights to buying a home:
- If you’re thinking of buying a home and you’re not sure where to start, you’re not alone.
- Here’s a guide with 10 simple steps to follow in the home buying process.
- Be sure to work with a trusted real estate professional to find out the specifics of what to do in your local area.
Contact us for more information on how we can help you buy a home.